But be aware of the cost… The evolution of the ESG landscape can potentially lead to incremental costs to investors, asset managers and corporations: ESG commitment, reporting and analysis take time and resources to implement. This raises a host of questions for asset owners and managers: • Many institutional asset managers have created specialist ESG teams. Is all this justified, or should such expertise just be embedded in traditional fundamental investment analysis with a long horizon perspective? • Can a focus on ESG distract the investment focus away from return maximisation? • In particular, could the increased emphasis on ESG ratings encourage mutual fund managers to make their funds attractive to investors by increasing the weight of high ESG-rated securities with insufficient consideration of financial risk and return? • Can the increasing scrutiny and reporting burden that comes with ESG deter private companies from going public, or even encourage public corporations to go private? ESG ratings are generally published for publicly listed companies although corporate bonds can be issued by both public and private firms. A trend towards private ownership could limit the ESG rated investment universe of asset managers. 19